Private aviation is set to emerge from the Covid-era, whenever it ends, as much as 10 percent larger than it was before the virus, according to new research.

The industry has been a bright spot in the broader travel industry since May 2020 when U.S. private jet flights started their recovery. In fact, last month was the busiest for private flights since October 2007. July 1 had the most private flights – 12,345 – since March 20, 2008, according to Argus TraqPak.

Private aviation is reaching record levels. One report suggests the industry could be 10% larger ... “Business aviation continues to show that we are well past recovery mode and into growth mode…We are looking at an industry that is five percent to 10 percent larger post-pandemic than it was pre-pandemic,” says Travis Kuhn, vice president of market intelligence at Argus International.

WingX, another aviation research firm, reports U.S. private jet flights were up 30% versus the first 26 days of July 2019. There are no signs of demand ebbing. TraqPak analysts estimate flight activity from July through December will increase 32.7% over the same period in 2020 and 9.9% over 2019. August and October are projected to top 300,000 private aviation flights during each month. That hasn’t happened since January 2007, according to Argus. What’s more, much of the demand is coming on short notice. The percentage of charter trips being requested within four days of departure jumped 26% to 43% this month, according to Avinode, an online directory brokers use to source flights for clients.

It’s not just flying that’s surging. Buying jets is on the rise as well. Members of the International Aircraft Dealers Association reported a 52% increase in second quarter sales. In total, its brokers sold 320 preowned private jets in the second quarter of 2021 compared to 211 in the first three months of 2021. IADA Executive Director Wayne Starling says supply of desirable aircraft for sale is the biggest concern. “We have buyers with funds to purchase, but demand for late model aircraft with attractive configurations exceeds supply, which could increase pressure on prices and lengthen transactions.”

Despite the pandemic, members racked up $11.3 billion in transactions in the 12 months through June. Average sale price was $8.3 million. A recent report by Global Jet Capital forecasts $162.1 billion in new and used private jet sales through 2025, a compound annual growth rate of 7.4 percent. In announcing its second quarter results, Textron Aviation said it delivered 44 jets, up from 23 last year, and 33 turboprops, up from 15 last year. Backlog at the end of the second quarter was $2.7 billion. According to a Reuters report, the manufacturer’s CEO Scott Donnelly told analysts, higher demand for private flying “seems to be quite sustainable.”

The number of pre-owned business jets on the market has reached the lowest level since records began in the 1980s, with 4.65% of the world’s fleet up for sale, according to a survey of jet brokers and research companies. 

In all, about 1,134 used jets are available, compared to 1,839 in June 2020, a decline of 38%. Multiple buyers and a shrinking inventory of available aircraft have made for a competitive market. 

“We recently tried to purchase a late-model Challenger 650 for a client, and at least six offers were made for this aircraft, which ended up trading close to its headline asking price,” a major industry broker says. “To say that the market is competitive at the moment is an understatement.”

The decline in inventory has been led by the U.S., which reopened faster than other parts of the world, he says, spurred by a desire to travel in an environment with a lower risk for COVID-19 transmission and a drop in airline service, bringing a large number of first-time buyers into the market. In addition, as inventory declined rapidly, aircraft owners are often holding onto their current aircraft as they struggle to find a replacement, further decreasing aircraft coming available for sale.

At the same time, a surging stock market and real estate market, historically “cheap debt due to government stimulus” and depreciation benefits on private jet purchases have removed many of the financial pressures some owners may have been under to sell their aircraft under more normal circumstances. It is also encouraging new buyers to act. 

Molly McMillin
Molly McMillin, a 25-year aviation journalist, is managing editor of business aviation for the Aviation Week Network and editor-in-chief of The Weekly of Business Aviation, an Aviation Week market intelligence report

The pre-owned business aircraft market saw a 7% increase in sales volume in Q1 2021 over Q1 2020, while Ask Prices were down nearly 6%, reports the Asset Insight Market Report. Overall demand remained unchanged over Q4 2020, but increased nearly 44% compared to Q1 2020. The Market Report covers 134 fixed-wing models and 1,661 aircraft listed for sale.

In Q1 2021, higher quality, newer aircraft were the ones primarily selling, leaving the older aircraft with lower quality ratings in the for-sale pool, resulting in the inventory fleet posting its worst ETP Ratio (Maintenance Exposure to Ask Price Ratio) on record, 74.4%. Aircraft with an ETP ratio of 40% or higher were listed for sale 69% longer than aircraft with lower ETP ratios. Maintenance Exposure (an aircraft's accrued/embedded maintenance cost) increased for all jet market segments compared to Q1 2020, while Exposure for Turboprops decreased year-over-year.

"Across all segments, the pre-owned aircraft market was robust and active in Q1 2021," said Tony Kioussis, president for Asset Insight, LLC. "Buyers snapped up late model, higher quality aircraft at an impressive rate. Owners with aircraft carrying higher Maintenance Exposure should expect to spend over 6-months more on the market than younger aircraft with less pending maintenance."

On balance, Ask Prices were down across all market segments during Q1, year-over-year. During Q1 2021, Mid-size jets and turboprops increased prices, while Large and Light Jets saw decreases.